Even ‘insular’ midstream companies feeling effects of downturn

It had long been conventional wisdom that midstreamers were the most insulated from the current downturn. That view is sadly in the stage of being undone, with Enbridge and TransCanada announcing cuts. Thus, industry layoffs now affect the full panoply of the Albertan oil & gas industry, from oil field services to E&P to midstream. And regrettably, where there is breadth there will soon be depth, because cuts beget more cuts.

Yes, not all midstreamers are alike. They vary substantially in size as well as services offered. Enbridge and TransCanada both have massive, multibillion dollar projects that have been put indefinitely on the back burner. So predictably, they have had to take their lumps. But what we have here is an instance where job cuts can be directly tied to political interference, rather than commodity prices. It is no coincidence that both these companies were the victims of capricious governmental decision-making, i.e. the Northern Gateway tanker moratorium and the Keystone XL rejection. Low commodity prices did not kill these projects. If anything, they strengthen their case.

Certainly, many fear for their jobs as we approach the holiday season, and rightly so. I have sounded the alarm before and will continue to do so. But my goal here is somewhat different. My message is obvious. But even the obvious requires repetition. There is simply too much noise and distraction out there. We are all susceptible to it, and we all sometimes miss the obvious. There is also a dearth of media attention focused on the controllable causes of our current woes. For the most part, the establishment media prefers to treat our current government as just another government and our current downturn as just another downturn. This denial is understandable; people do not like to think that things out there are really so bad. And that is why I need to repeat myself.

So, in light of that, let me take the opportunity to repeat the obvious. Things are bad, and they are like this in large part because the government entrusted with this province’s economic wellbeing is too busy trying to think of novel ways to squeeze more out of taxpayers and job creators while looking good in front of the cameras and on social media for outside audiences who simply have no dog in this fight. Things are bad because prices remain low, because projects are being cut, and because we are not yet at the point where things cannot get worse. Things are bad because even when we have our eventual recovery – and all signs point to it being an anemic one – the things that affect everyday people – hiring – will lag the recovery by many months. Things are bad because Alberta is no longer a stellar place to do business. In short, things are bad because they are going to get worse.

Our government will not take responsibility for its hand in this state of affairs. It wants people to think low commodity prices alone are to blame, as if its policies did not stoke the fire. It wants people’s continued indulgence, insisting that it be treated just like any other government as it surreptitiously toils to remake Alberta in its ideological image. Premier Notley would prefer to blame the PCs for everything as she goes in front of the world in Paris to lambast her own home to the applause of foreign elites. The NDP prefers people to remain apathetic and distracted, and if that requires fanciful promises of infrastructure, jobs, refineries, and green energy, so be it. So much the better when all the damage can conveniently be blamed on outside economic forces alone.

This government is in the business of perpetuating itself. Perhaps they all are, but most at least have the good sense to leave the economy alone. This one is not so restrained. It wants to build a vibrant public sector and let everything else atrophy and stagnate. What it wants from the electorate is the benefit of the doubt, but such forbearance is an exceptionally dangerous indulgence when the economy is in a tailspin and the window to stabilize things is rapidly closing. So, in the spirit of the holidays, make sure that in place of your patience, you make sure our government gets a well-deserved lump of coal.